Elder Corporation incurred the following transactions. Purchased raw materials o

Question

Elder Corporation incurred the following transactions.

Purchased raw materials on account $46,300.

Raw Materials of $36,000 were requisitioned to the factory. An analysis of the materials requisition slips indicated that $6,800 was classified as indirect materials.

Factory labor costs incurred were $53,900, of which $49,000 pertained to factory wages payable and $4,900 pertained to employer payroll taxes payable.

Time tickets indicated that $48,000 was direct labor and $5,900 was indirect labor.

Overhead costs incurred on account were $80,500.

Manufacturing overhead was applied at the rate of 150% of direct labor cost.

Goods costing $88,000 were completed and transferred to finished goods.

Finished goods costing $75,000 to manufacture were sold on account for $103,000.

Journalize the transactions. (For multiple debit/credit entries, list amounts from largest to smallest eg 10, 5, 3, 2.)

Account/Description Debit Credit 1.
      2.

      3.
            4.

      5.
      6.
      7.
      8.
      (To record sale of goods.)
      (To record cost of goods.)

Explanation / Answer

Raw Materials 46300 Acct. Payable 46300 Work in Process INV 29200 Raw Materials 29200 Factory Overhead 6800 Raw Materials 6800 Work In Process inv 48000 Wages Payable 43636 Wage Tax Payable 4364 Factory Overhead 5900 divide by 1.1 to get the wage payable (Indirect Labor) and the difference will be the tax Wages Payable 5364 5900-5364=536 (tax) Wage Tax Payable 536 Factory Overhead 80500 Accounts Payable 80500 Work In Process INV 72000 1.5*48000 multiply the Direct labor cost Factory Overhead 72000 Finished Goods 80000 Work in Proc. INV 80000 Accounts Receivable 103000 Sales Revenue 103000 Cost of Goods Sold 75000 Finished Goods 75000

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